The cost of taking over the banks

Stephanie:

Though you do so in a calm, measured way, you are describing a catastrophe in the making. Your point about new HMG exposure to foreign debt is hugely important but has not, previously, attracted much comment. A great blog.

But what would have been the cost of NOT taking over the Banks?

Let us face facts:

The banks are in all but name bankrupt - if they had been any other type of business they would be in receivership - that is if the information that we have so far seen is trustworthy!

The public finances are similarly challenged. The Country is not going to default but the cost of the restructuring of the banks has to be paid (and not borrowed!)

So pay cuts all round (for both public and private sector), expenditure cuts all round - as I have said before we cannot afford a number of projects - It would be better to cut the Olympics, the war in Afghanistan a continued commitment to Iraq etc. rather than support for the poor and destitute. Put interest rates up to re-establish some value for money. (An incomes policy with a maximum National income will also be appropriate for a while at least - particularly if a national pay cut is needed - oh and taxes will have to rise too.)

But none of the political parties are prepared to face up to the challenges of this disaster. But also none of them can escape the arithmetic either!

"That was when we discovered that the picture of the public finances painted year after year by the Treasury had been fundamentally, unforgivably wrong."

I therefore trust that there have been massive firings in the Treasury due to this failure. In the private sector such failings would have caused people to be sacked, so why not in the Public sector?

And what about apologies for the errors?

(Or is the squadron of pigs lining up on the runway on both points?)

I think it's highly unlikely that the government would stand behind £1.5 trillion of bank liabilities if there were a run - even though the government is a majority shareholder, it would not be liable for such debts.

However, is such a run likely or even possible? I would be interested to know what the relative maturity of the foreign-currency assets and liabilities of the banks are.

First, as Stephanie says, they hold a reasonable match of assets and liabilities in foreign currency. i.e. if they have borrowed £1.5 trillion they have also lent £1.5 trillion and the two should roughly match up.

But second, do they have to repay the liabilities before they can collect on the assets? For instance, have they lent out $100 billion in 30-year mortgages in US dollars and financed it with $100 billion of short-term money market borrowing? If so, they may have to repay the $100 billion before they have the money to collect it.

In this case, the UK government might decide that it's in its own interest to help refinance the borrowing, so that the value of its RBS and Lloyds shares would not be destroyed.

However as Stephanie says, the Federal Reserve would probably extend the same liquidity assistance to the UK government that it has offered to US banks. And presumably the Bank of England would do the same for American banks with mismatched UK liabilities. Perhaps the IMF could act as clearing house for this.

I suggest a possible measure of liquidity risk in the following article - I would love to see the banks obliged to disclose these figures as part of their regulatory obligations:

https://www.knowingandmaking.com/2009/02/illiquidity-measures.html

Do these figures not really mean the UK plc is in the mire (to put it politely)? Is not the next step recourse to the IMF (for a second time by a Labour Govt)?

This comment was removed because the moderators found it broke the house rules. Explain.

Really like the style of your blog. Cool interpretation of facts - no hysteria, no snuggling up to the Administration party line. Thank you - keep it up.

And still the Golem doesn't believe it's in any way, shape or form his fault?

#3
'In the private sector such failings would have caused people to be sacked, so why not in the Public sector?' Hummmmm. Having difficulty with that concept when applied to the financial sector. Agree that it should happen no matter what the sector.
Very scary post Stephanie, although if UK PLC had to rise from the ashes may be it would not base its economic sytem on something so fundamentally flawed as free market capitalism?

Stephanie, where are you getting these figures from? Specifically, your claim that our banks do have significant foreign currency liabilities - around £1.5tn.
According to the Joint BIS-IMF-OECD-WB External Debt Hub the UK gross debt position at Q3 2008 was 10,745,772 million USD (10.75 trillion USD) [Unsuitable/Broken URL removed by Moderator]

Given that the government admits to around half a trillion GBP of debt that would seem to leave some 8 trillion USD unaccounted for. Do you know who holds it?

The figures I quote are gross debt. I do not know what currencies these liabilities are in nor the quality and liquidity of the assets that presumably support these loans. Nonetheless. The scale of the problem may be somewhat greater than your article implies.

It looks to me that HMG would have little choice but to do an Iceland if there were any run on this level of debt, or even a hiccup in revolving its financing. What value the pound then?

PS #2 John. Please stop coming up with sensible solutions lest you wreck my survival strategy which is based around an 1842 silver groat coming good.

Now and in the future we will be working to earn money which we have already spent in the past....

By getting ourselves into debt, consumers and some corporations have already spent tomorrow's earnings. Now tomorrow has arrived we are beginning to pay off our debts, and we are not spending money. This lack of spending is causing demand for goods and services to fall sharply. As a result, corporate profits have reduced, and tax receipts have fallen. The low tax receipts just complete the circle.

The British government is willing to borrow more money today and spend it now, to replace a small proportion of the fallen demand. However, the government cannot hope to take the place of all those consumers and businesses who have stopped spending.

Eventually, the government will be in the same position as the rest of us - it will have to start paying off its debts. It will do so by increasing taxes and by reducing its spending. The trouble is, when this happens, we consumers and businesses will still not want to spend, as we will still be in the process of paying off our debts. We will also be saddled with an increased tax burden. At that point, no-one will be spending in the economy, not even the government.

It will take years to pay off or write off all the indebtedness. More of the debts will go bad in 2009, 2010 and beyond. Corporate profits will be kept down, due to low sales levels and bad debt write offs. This will keep downward pressure on tax receipts.

The British economy cannot begin to recover until the level of indebtedness and the increased tax burden are brought down to comfortable levels, allowing consumers and businesses to begin spending again. It will be years before this happens. In the meantime, we are caught in the debt trap.

Hi Stephanie,
I've heard the IFS, other analysts and you today content to make an assumption that bank liabilities, be they foreign currency or other, are matched by assets. These 'assets' are the loans, financial instruments which are causing huge concern in that they cannot find fair value / liquid markets to exit. Central banks are having to try to create markets with their own funds. The depth and breadth of the recession will dictate the quality and ultimate value. I dont find myself taking the same comfort as it seems you do.

" the government's net position has not changed.." is an accountancy assumption, isnt it?

What's great about this situation is it has really shown up Economists for what they are.

Agents of the Bourgoisie.

There isn't an ounce of truth in what they say, and you would be better off asking a 5 year old.

Unfortunately, at the risk of looking silly, the Government seems to lap up every piece of incontenant tripe that comes out of their mouths.

The crisis is not caused by a lack of confidence, the lack of confidence comes as a result of the crisis.

The only thing that's changed since 1929 is the Government has got better at using the tools it has available.

However, the tools at best, only blunt the recession and does not stop it - in fact cannot stop it.

What we have here is classic Capitalist overproduction. That's why the oil price is on the floor and everyone is worrying about deflation.

Look at the language being used in the media to trick the people.

"Bailing out your banks"
"Saving your financial system"
"Reviving your Economy"

The banks failed - they blackmailed the Government for a bailout because their failure would have been catastrophic - the Government then blackmailed the public saying 'give us the tax money or you will all be jobless'

What people need to think is who will be worse off if the Economy collapses.

a) The rich
b) The poor

The answer is a) (the rich) as they will loose all the stolen wealth they have built up.

The poor have nothing to loose.

The whole thing is a historical event starting when Capitalism started.

World War II
The bretton woods agreement
Keynesism
The emerging markets

What will save us this time? And if there is a new boom createor - how big will the next bang be?

We're sitting on 70 years of boom all told - the recessions in between have been merely blips.

One day it has to all come crashing down.

How do I know this? Well apart from being predicted by Karl Marx - how about this simple explanation.

Who can ever remember a prolonged deflationary period?

Probably no one - ergo we have been inflating for years.

What happens to a baloon if you keep on inflating it endlessly?

A. It bursts.

....as will the economy, unless we grow our economy at the same speed at which the popoulation grows - then the baloon will burst and we will all suffer a harsh period of Austerity.

It's simple, it's logical and the only people who don't want you to believe it are those who benefit most from the current system.

Wake up UK - you've been asleep all your life. It's time to read up and rise up.

So if we are saying that Gordon really did get it all wrong, when is he actually going to admit that?

Who is asking these questions?

Or is this really on the back of briefing from Harriet Harman?

At what point is anyone accountable?

It's worth looking at where HM Revenue and Customs gets most of its money from, as businesses, one must remember, make considerable efforts to avoid paying tax, as was remarked upon to senior executives of our banks by the Treasury Select Committee on 11th February. Income tax, for most normal, UK domiciled people, on the other hand, is much harder to legally avoid.

I also have to ask whether the bonuses for the civil servants working in the treasury department are also going to be rescinded...?

Don't reward failure.

What difference does it make whether the debt is private or public? Am I right in saying that the important thing is the level of debt with respect to GDP, and their respective trends?

money , money, money.
I am no economist, but then again you could argue the government is just as clueless . Without doubt we are really in the stew , once the world markets believe there is money to be made out of UK PLC predicament ,I think it is 100% likely the uk government will need third party assistance.

Reducing public spending & raising interest rates to protect our currency is the only sane way forward . We are currently living beyond our resources and this needs to be changed quickly , or the pain will go on and on ..

money , money, money.
I am no economist, but then again you could argue the government is just as clueless .Without doubt we are really in the stew , once the world markets believe there is money to be made out of UK PLC predicament ,I think it is 100% likely the UK government will need third party assistance.

Reducing public spending & raising interest rates to protect our currency is the only sane way forward . We are currently living beyond our resources and this needs to be changed quickly , or the pain will go on and on ..

I agree with No 7. Stephanomics is exactly what it says on the tin. Very refreshing in the on message/off message world in which we now live.

Tax income down (and will be further reduced when the impact of lower dividends, income and interest rates shows up in 2008-2009 tax returns), debt increasing, expenditure increasing....all going in the wrong direction. Like most forecasts these days I suspect the volume of quantative easement contemplated will be much lower than the amount actually required. What an earth is going to be the effect on the political and social stability of the UK ?

writingsonthewall # 13

"The whole thing is a historical event starting when Capitalism started."

And when was that?

JadedJean # 15

"...as businesses, one must remember, make considerable efforts to avoid paying tax..."

Now, why is that?

Great blog Stephanie, cool, calm and dispassionate but so insightful!!

So the picture is bleaker still than anyone had first imagined. The reality is that UK PlC is not alone in being financially bust. Global PLC is in a collective state of recievership.

There will not be any quick fixes; the prospect of our childrens children will still be paying for the mistakes of our profligacy looms very large!

But we have to start somewhere and that is now. Structural changes to the global economy will be needed. Exisiting financial institutions will have to respond to those changes and in turn will reform themselves.

If this is going to work it must be built around consistent regulation and greater interaction between Governments and Market regulators. Better then that time and great care is taken to avoid the problems that brought about the current crisis.

That regulation needs to address the 'exporting' of Investments that have as their basis a fundamental asset class that could allow a downturn in underlying asset values to spread like contagen to other economies.

I was never comfortable with the idea that banks could or should be providing residential mortgages. Mutual Societies have a recognised place and serve the shareholders well. A return to makret segmentation in this form is a prerequisite and the UK government is well placed to make this happen through its ownership of RBS/Northern Rock/LLoyds Banking Group.

If the price of this is reduced competition and choice then perhaps 'less is more'. Retail banks need to reduce the scale of their operations and thus focus back on deposit taking and SME business banking. Getting back in touch with real customers and understanding real needs may just make them better.

Investment banking has a role but it is primarily that of serving global trade and providing the Investment community with the tools and products to facilitate growth in capital. I am sure I am not alone in questioning the wisdom of an investment bank selling CDO' s to a pension fund that has as its security a house owned by the very workers whose pension funds they manage?

If we are to secure the real benefit of any future prosperity then let it be on safe terms, where caution wins out over hubris and performance driven cultures

FrankSz

It makes a massive difference if the debt is public or private.

If it is private debt then it can be defaulted (say though bankrupcy) - the lenders took that chance.

If it is public then future taxpayers are enslaved until it is paid off.

The government should have let a bank go bust - the others would soon have worked out what to do (at no cost to the tax payer).

Now they all just sit on their hands (and piles of taxpayers money) waiting to see what Gordon will do next.

Brown is on his own, and doesn't have the tools for the job.

hughesz # 18

"Reducing public spending..."

Very unlikely. The government have their favoured groups to think about and besides its election time next year.

LibertarianKurt (#23) "Now, why is that?"

The point above was that corporation tax is not major source of revenue. In the light of BBC NEWS reports today some might have thought the reported percentage drop in corporation tax revenue was of major concern.

"But our banks do have significant foreign currency liabilities - around £1.5tn. And with the arrival of Lloyds and RBS a fair chunk of those are on the government's balance sheet."

Yes, that is the big problem with the effective nationalisation of the banks. Take the following scenario.

Rich (foreign?) person lends money to bank. Bank lends money to individual to buy over-priced house/business. Individual defaults. If bank goes bust, rich person loses their investment. If we bail out the banks, then the rich person loses nothing, but the tax payer takes over the debt.

Why are we accepting this? If the rich person has been daft enough to lend to a bank with a dodgy lending strategy, then they should pay the price.

Why do we British always want to play fair? Are the Americans going to bail out everyone who lost out on the Madoff scam? I think not.....

Until you admit to having a problem you will never cure it. Ergo whilst Brown is the head of UKplc we really are screwed.

the-real-truth # 25

Ah, at last! Someone is talking sense.

17. FrankSz

''What difference does it make whether the debt is private or public? Am I right in saying that the important thing is the level of debt with respect to GDP, and their respective trends?''

No what is important is who is benefiting from the debt and who is paying for the debt by whatever means, direct or indirect. You are looking at increasing dysfunction between cost and benefit. The breakdown in the link leads to erratic financial behaviour which causes damage to the whole work activity, the whole economy. If an individual works but gains no long term advantage they stop working. If the benefit of gaining money is not restrained by paying for it then there is no limit and money is devalued. You have seen increasing derangement in government actions and there is no sign of it stopping. It is heading for its logical conclusion which is functional breakdown. HMG and its various agencies such as LG will only stop spending when the money box is empty and the future budget depleted. It is irrelevent what the money is spent on the activity is to spend. There are two many fantasy stories being promoted to gain funds. eg jobcentres need more funding. Why how does that create jobs in the private sector. Auto manufatcurers need funds to carry them thru to an upturn. Why, there is oversupply, there will not be a return to the previous levels. Digger manufacturers need funds from the taxpayer to pay the majority, not minority, of their workers till people decide they want diggers. What is the point of stockpiling diggers. LGovnmts want more funds because they have made 1 billion of bad investments in Iceland by their own decisions. The social benefit of loading up the public deficit is being overplayed, as is the size of the funds available in the public purse.

JadedJean # 27

Apologies, maybe I should have clarified the point I was trying to make: Why do businesses - in fact, why would any individual if he/she had the means - go to extraordinary lengths to avoid paying taxes?

Blaming the reduction in tax receipts in Jan 09 is due to the Recession is unlikely to be wholly correct. The Jan 09 tax receipts relate to balancing tax payments for the tax year to April 08 and 1st payments on account (for 08/09 tax year) for the self- employed. Also corporation tax receipts for Jan 09 relate to the 12 month trading period to 30th April 2008. Clearly at April 2008 the "R" world was not in constant use [by the BBC] and I recall we were all more concerned about high oil prices at that time.

Furthermore the reduction in VAT from 1st December would only have a marginal effect as the January receipts would relate to the quarter ending December 2008, so only 1 month would have been paid at the new lower rate. This should only account for a approximately £1BN shortfall assuming the 13 month period of lower VAT was going to cost the Exchequer a total of £12BN

However current year issues such as salaries & bonuses paid under PAYE in December would impact on the January tax receipt figures.

While the January tax receipt figures are by their nature concerning - it is irresponsible for the BBC and other parts of the media to state the headline receipts are due to the Recession which started in the Autumn of 2008. More consideration of what constitues the make up of the tax take at this date should be considered.

#25

Well I thought about it and no I still can't see the difference. If BankX has foreign currency liabilities of Y, what difference does it to things if that debt is public or private? If the bank was so unimportant that we could just let it fail a-la-freemarket-fundamentalism then why are we wasting our time bailing it out?

Expectations play a huge role. If the evidence says that nationalisations historically accompany currency stabilisation, in all probability that is what will happen.

https://arthshastrafx.blogspot.com/2008/09/nationalisation-currency-weakness-by.html

Steph, you should get the IFS to revise their borrowing figures for 2009 onwards. They were based on ridiculously optimistic forecasts for growth. Growth and borrowing figures are going to be a lot worse for the next few years than most people imagine.

Everyone, tell your grandchildren to start saving their pocket money.

LibertarianKurt (#32) Sanity. Standard business practice. Duty to shareholders. Call it what one will.

Anyway, if the UK were to let banks fail, this would of course devalue British assets as no doubt many businesses would be connected to the bank that failed. Also it would cause a loss of confidence in investment in the UK and probably kill Sterling. I think the GREAT BIG MASSIVE HUGE problem that some of the market fundamentalists here seem to be somehow overlooking, is that if we were to let banks fail, then not only would the UK turn into a 3rd world backwater for the next 50 years, but because of the significance of Sterling and the fragility of the banking sector in general, the rest of the world could turn into Zimbabwe too.

The UK cant just pull an Iceland and say to the rest of the world 'sorry we won't pay we're just closing the banks goodbye and happy fishing'.

So, market fundamentalists of the world, pack up the ideology and swallow the fact that from New York and London to Timbuctoo it's nationalisation galore.

Then, when it's all fully nationalised, the government has to somehow reduce the liabilities. This is where I get uncertain - over what time frame and how does the govt go about doing that? There could be all kinds of complex hedges and things involved and I can't really imagine. In any case, nationalising the banks is a GOOD THING. At least we can look forward to a MacDonalds instead of having to cannibalise our aging relatives.

FrankSz # 34

"...why are we wasting our time bailing it out?"

Indeed, why are we - and a lot of taxpayers money (wasting) too!

And here's the real exit

https://news.yahoo.com/s/nm/20090219/pl_nm/us_obama_canada_13

It is frustrating that we are being left behind again. I tell you, in 5 years we'll be buying US clean energy tech and they'll be raking it in. While we sit around here debating QE and the religious morality of nationalisation, we should get it over with, nationalise whatever needs nationalising, shut up, and start building things.

If foreign or domestic investors are about to abandon the pound there is little evidence to suggest it from today's issue of gilts. The £3.25bn auction was 2.6x subscribed. This is the most for some time, with total bids of nearly £8.5bn! (See DMO website - you can track the relative attractiveness of UK gilts on a daily basis if you want to).

Just maybe the (deliberate?) policy of weak sterling is making UK gilts look like a very good buy right now.

Stephanie,
Another excellent analysis.
I point out that it seems to be UK oriented when we all are aware that the problem is international, not only domestic.
Yes, everyone in the British Isles do not want to tighten their belts or lose their family homes or sleep on cold, wet streets.
And how can those nutritionally survive? £/$ etc./s for pizzas, burgers and some of the over-packaged offers?
Grow your own when your Nikes are splitting to bits?

Are not World Citizens fearing for their personal human concerns in this economic maelstrom?

Are not World Leaders fearing similarly?

Neat, we hunker down in the trust that "Things will only get better".

N.

P.S. Did Her Majesty place her sword on Allen Stanford's shoulders?

JadedJean # 37

Partly correct. But there's significantly - especially in the case of individuals - more to it than that. Maybe, just maybe they feel like they are being ripped off?

FrankSz # 40


Yes, nationalise everything because “we are all socialists now!”

https://www.newsweek.com/id/183663

Last time I blogged on here I was murderated as being off topic, simply for answering another poster's direct criticism of me! Hardly freedom of speech! Will try again today.

Stephanie, if I understand you correctly, we are, as a country even more royally 'up the Swanee' than has previously been mentioned in the public domain!

What an unholy, terrifying mess we're in. All this borrow short, lend long for the sake of greed is bringing the entire world down around our proverbial ears.

Your facts - are they actually facts, or interpreted statistics? I have no criticism of this, save that once interpreted statistics are in print, they are assumed to be facts. With a deep foreboding in my heart, I sincerely hope that in this case, the interpretation is wrong. If the scenario you describe is an accurate forecast, I really don't see what will prevent us becoming the next Iceland (unless parts of Eastern Europe don't get there first!). Germany have made a vague magnaminious gesture about helping fellow European nations in difficulty, but can they afford it? And worse still, would that generosity extend to us if the worst came to the worst?

On the corporation taxation side-as the most taxed country I'm aware of-it's not surprising that people will try all they can to avoid paying their tax. If taxes had been reduced months ago, there would be more money in the system now. Why do you think very few foreign companies set up in the UK?

Thank you for direct, non sensationalist reporting that respects your readers' intelligence, Stephanie. Great to be treated as a grown up by a BBC blogger. Don't change!

We all know how it worked out for Iceland. Let's see how it works out for Ireland. It would be nice to have two data points before we are fully committed. #1 is right, this is a catastrophe in the making.

"There are plenty of foreign currency assets to put against those liabilities, so the government's net position has not changed."

We are seeing a global asset price collapse. This is a problem when the amount of debt outstanding remains the same. Our leverage would increase independently of anything we could do.

Let's stop faffing about and develop a strategic plan for the UK economy. Then spend everything backing it!

Will it happen? - NO because it's too hard for our leaders and they would have to adopt a protectionist policy.

If we don't then we are going to hell in a handcart

LibertarianKurt (#43) "Maybe, just maybe they feel like they are being ripped off?"

No doubt at least some of those people only think about themselves whilst others do not understand that ability is not uniformly, but normally distributed?

It's much easier/more convenient for some to assume that everyone is the same and that those who can't or don't behave like the more fortunate just choose to behave that way and just need motivating...

Government policies in this crisis all feel like smoke and mirrors with little substance,whether talking about the UK, US or elsewhere.

Alan Greenspan presided over a period of reckless credit creation (mirrored by the BoE and Brown). People companies and governments borrowed ridiculous amounts to fund their purchases of houses, cars, consumer items, businesses, wars, etc. Their belief apparently (only a few years would rise forever and that government deficits were not a problem.

Then reality strikes and asset values fall. People panic and so the central banks pull the interest rate lever to encourage people back to more crazy spending. This fails. The banks reluctantly admit a problem (but not the true extent of the problem). Then the confidence evaporates. Northern Rock, Countrywide, Merill Lynch, Bear Stearns, Lehman, Fannae and Freddie, AIG, Washington Mutual, Wachovia, RBS, HBOS all disappear or need propping up, taking over or partial nationalisation.

Now we're really in trouble. Unemployment rises, GDP goes negative - this is so much more than your regular recession. But let's not use the "D" word.

Now governments think that having hit near zero interest rates, how can we get things moving again? Simple. Let's rabbit on about "quantitative easing" and allow people to have more money in their pockets (once we can force those banks to lend). Then if the government spends a few trillion in the US and a few hundred billion in the UK on "getting people back to work" - then things will be OK. Won't they?

If a patient in a mental hospital spoke with this kind of logic, they would probably not be likely to see the outside world for quite a while. But then maybe it is we who are in the mental hospital?

It's always difficult to tell with smoke and mirrors.

foredeckdave # 47

"Let's stop faffing about and develop a strategic plan for the UK economy. Then spend everything backing it!"

Who's money are you spending?

Morning Stephanie,
ah yes the net cost of taking over the banks...as usual nobody in HMG has a clue how much this may be, but they don't care as they have an election to win...resistance is futile...you know it makes sense.

One other disturbing aspect that I read this week concerns the interference by HMG Quango into the affairs of private companies with respect to pension provisions.
As I understand it, they want to rewrite the rules where first call on profits is for workers pensions (deficits)and not for shareholders dividends.
Now project that forward and if investment agencies sense that they will be deprived of their income stream, they will sell their shares.
Now how does that help the companies involved and their workers? Madness once again in the name of political interference.
The banks that you talk of in your blog have extremely large pension funds and liabilities so could you comment on the effect of this policy on the cost of taking over banks?

As an aside, I note that Gordon (my hero) having courageously and single-handedly forced the banks to recant on their bonus schemes with taxpayers money now wishes to give 4000 civil servants bonuses averaging 9500GBP each! What the he** for? Give them bonuses in the form of bank shares is what I say (sauce for the goose and all that).
Will it happen?

#50 EVERYBODY'S!

Might as well do something useful with it than throw it into the black hole formerly known as the international financial system

JadedJean # 48

Death (as opposed to choice) and taxes; is more appropriate, wouldn't you agree?

foredeckdave # 52

"Might as well do something useful..."

Are you Gordon Brown's secret economic adviser?

Crimes against humanity. This is going to hurt. LG have made a mess of things, have they not? I live abroad, lower tax – but look after yourself. Seems to work. Less benefits and more incentives are going to have to help push the economy along. Because the remaining tax payers I know are struggling.

On the plus side, how about a 5% tax on the difference between the purchase price of a house and the sale price, with no exception for first residences? This mess has to be paid for somewhere.

And a scrapping of expenses and allowances for MP’s, elimination of Welsh and Scottish Parliaments (that would be a good start)???

"the picture of the public finances painted year after year by the Treasury had been fundamentally, unforgivably wrong"

Interesting, Stephanie. Perhaps the next step will be for the appropriate body to pull in whoever was in charge of the Treasury "year after year" (anyone know where he is now?) and see if he will apologise? He could also apologise for manipulating all the othet government stats he's interfered with as well. After that he could quietly go away, as since he has shown us that he does not have the faintest clue about what he has done or what he is doing now, there is no point in listening to what he thinks might happen in the future.

On another angle to this blog, can anyone comment on the international comparison please? Presumably other major economies have much worse positions, since we are reassured by the current PM that we are better placed than everyone else to weather this one out. Anyone got some figures we could look at?

PS - very good story by the way - hope you get some credit for picking it up.

Following on from Post 56, Stephanie, could you provide a summary of the economic initiatives announced by our great leader in, say, the last 9 months and an indication as to how they are progressing. I strongly suspect that many, if not most, will not have got off the ground - such as the mortgage protection scheme for the unemployed which was announced a couple of months ago and is apparently yet to get started.

A second list might be interesting - summarising the government's exaggerations (aka spin) in the last few months. Perhaps near the top of the list will be the 12,500 jobs secured through the Hitachi train contract which now turns out to be closer to 200.

#44

Nationalisation is not socialism, it is state capitalism.
We can see this clearly with Northern Rock - private profit, social losses.

The means of production only come under collective ownership with the democractic framework in place.
That is direct democracy through councils over the majority of the world through which the people are both legislature and executive.

It may be somewhat hopeful, but perhaps the World Social Forum and all their subsidaries (I believe there is/was a London Social Forum: www.londonsocialforum.org) are the embryonic form.
Get involved in/start-up the forums and change the world.

#58

Absolutely - there is no reason why scientific institutions and individuals cannot be directly involved in state decision making via internet technology. In the past such all embracing approaches were not technically feasible but today they are. We should be upgrading society and now is the right time to do it. We have to move towards a new technological vision of optimism and prosperity through a combination of new high technology and the right choices for which types of technology to invest in. There is no reason why in ten years time we and our children could not be living in a happier, cleaner, healthier, world with poverty and disease on the road to removal.

I have just 3 words.

Ludvig Von Mises.


He predicted all of this 80 years ago. He has also described what will happen next.

I'm off to buy 1 years supply of canned food to store in my garrage - just in case all you economists are wrong again. I would hate to discover all those lovely £1 coins are worth more for their metal than spending power.

Given the famous HBOS strategy of borrow short and loan long, I assume that the liabilities will fall due before the assets supporting them mature (if they are truly worth the 1.5tn assumed intodays market).

Surely what we are doing then is setting the pound up for a sucker punch? I can immagine Soros & Co licking their lips as they contemplate all these liabilities falling due. Surely it is the perfect cue for a Black Wednesday MKII with the currency speculators forcing a run on the already toppling pound?

After the support that the pound recieved on Black Wednesday, I can only view your comment "other central banks would certainly rally round" with scepticism.

Imagine if across the EU the decision was made to deploy a new fuel distribution infrastructure, for example Hydrogen, which could be used in fuel cell or hydrogen combustion engines. As an incidental byproduct this would result in technology that reduced the cost of desalinisation plants and water distribution technology. Imagine that this Hydrogen was initially subsidised by the EU so that the consumer's running costs of H vehicles was dramatically less than petrochemical engines. These subsidies would be relaxed as the technology progressed, reducing costs.

Can you imagine the stimulus??!? Can you imagine how manufacturers would be converting over to new tech, how many jobs would be created from public spending, how much technology could be sold to other places like China and so on, what the impact on the world would be as it escaped the stranglehold of oil? Can you imagine how renewable energy would be put to use? For example sunlight concentrated into furnaces that converted seawater into salt, hydrogen and oxygen?

The impact would be phenomenal. It would take time but the transformation would trivialise this Depression.

America is lucky. They had eight years of a hardline conservative running their country into the ground. It was lucky that this provided the incentive and opportunity for a team of intelligent visionaries to step forward and radically change the direction.

Obama and his team are doing exactly as I describe above. They are upgrading government to take better advantage of internet technology, and they are digging their way out of this hole through public spending on new energy and infrastructure.

We could go one better. We could make the decision and wrench the system into a new shape. Instead we focus on money, whine about indexes and indicators, and it is all for nothing. It is a waste of time. Money is nothing more than a tool for quantifying the will of people. We should nationalise what needs to be nationalised, and direct funds into the new systems that are viable and sustainable.

62. FrankSz:

Sorry, but this is pure fantasy!

If the technology to do this in an economically viable way existed then it would be done already.

If it is not economically viable, then you need to invest more money in science to find ways of making is viable.

If you deploy a system which is not economically viable and relies on subsidies then you are throwing money away, and no one else in the world is going to buy it.

You are right in that spending on science and education is the ways to go in a modern developed economy, but you need to spend on the fundamental research first. To give you some idea of how bad this is at the moment: a recent Horizon program said that in the UK we spend more on mobile phone ringtones than fusion research!

No. 63. FrankSz

I agree with you. The best way of paying off the private and public debts is to find a way of boosting cash flow. If we can find improved technological efficiency, it will boost profitability and therefore cash flow.

Technological advance will pay off the debts.

I can't see any other way out.

MrTweedy # 63

Technological advancement comes at a cost. Only through the private ownership of the means of production can efficient capital construction ever hope to meet the costs of technological innovation.

You are trying to put the cart before the horse.

#64

There are a number of problems with this view.

a) Abundant energy is not and can never be economically viable as competing private businesses. A price system relies on scarcity. Private enterprise relies on the notion of profit for a few. Such systems are not sustainable and not long term viable. Economic viability of private enterprise is in itself not viable when dealing with planet wide or nation wide concerns.
b) Or as an alternative to a) - 'economic viability' needs an improved metric that deals with externalities. The actual costs of operations are not the same as the costs in terms of money. The notion that an oil operation takes 'free' oil at an extraction cost is redundant. The actual cost should include the value of the lost oil, which automatically makes all resource operations loss making. As our population expands and the imperative to recycle and renew grows stronger, the concept of free resources grows obsolete. In addition there is the discrepancy between the cost of driving a car, and the cost of pollution, which in terms of birth defects, respiratory illness, and the simple ecological impact of placing roads through forests for example, is immeasurably high.
c)Why do assume that this system is not economically viable in the traditional sense? The economic stimulus would be immeasurably high. The rewards from technological innovation would be phenomenal. The ability to deal with energy and water distribution will actually become a necessity in the near future. The population of the planet is about 6billion. In a short time it will be about 8.5billion. When this figure of 8.5billion is reached, water tables will no longer be able to replenish at rates faster than water consumption. Water will become scarce and its value and importance will trump oil today. Even in rainy UK it may seem strange to think that water will be short, but it will, and if desalinisation using wave power were a technical reality, then we would have a sustainable and healthy future before us.
d)Abundant renewable energy (ie almost free) is something that must be undertaken by the state, as under the free market and price system there is no incentive to achieve it. The value is value added to peripheral dependent industry. The reduction in operating costs, not to mention externality minimisation, would benefit all and also provide the inflationary effects to deal with Depression.
e) Your opening comment "This is pure fantasy", with respect and no intent of a direct on you personally, but with the full intent of attacking that attitude, indicates a defeatist and conservative approach that should be condemned and should cause shame. Look across the Atlantic and see how precisely these steps are being taken. They will work, given time. When they do work, people will go to work in the mornings with no smog. Electricity will be cheap. Water will be abundant. Technology will be being exported to China, to Africa, to the Middle East. It might even be given as aid. They will swap mineral wealth for new infrastructure technology and this way develop African nations. Developing nations will no longer be beholden to foreign debt aid and the petrodollar will be gone. In the meantime we will be stuck in the past, buying American technology, lagging behind as usual. Why? Because the blinkered, the weak, the mainstream are focussed on their existing mundane normality, unable to see that this paradigm is over, and unable to envision a future.

#65

Fully agreed. By the way - I posted in another thread - I'd be a bit skeptical about those CPI indicators before you sell your investments there - check a breakdown if you can get it to see what subsections of products/services actually impacted the CPI. Here in the Czech Republic we have the CPI data broken down and I can see that transport dropped sharply in Q4 2008 because of falling oil prices. Other stuff stayed flat or rose. Actual prices are sticky, market prices are dropping but won't be reflected in CPI until companies actually replace staff with cheaper unemployed ones.

64 simonmw3

I agree I am afraid that many posters have never been remotely near manufatcuring or R and D. It is just wishful thinking. It certainly will not sort this lot out anytime in the remotely near future. There are problems with the size of the UK economy being big enough for a home market to support major R and D and international cross boundary R and D in the EU just has not worked effectively enough to provide a vehicle. It is limited to industries seen as strategically or defence related, which have a history behind the, ie not from scratch. To compare what can happen in the US to what can happen here in terms of commercial exploitation of innovation is not realistic, and it is the four words all together which are important, commercial exploitation of innovation.

56 pilot speaking

In view of the fact that the stats are always extracts the problem you have is that you have to go back to the basic data extraction techniques to verify they are sound. Then recompile from scratch. It is not going to happen, too big a job. There is no real reason to expect any particualr major EU country to be dramatically better off than any other one. Added to that is the fact that supposed stregths can turn to weaknesses, eg Germany being strong on production and savings. Taxation is as I understand it pretty level across the major EU countries. The FX is a major advantage. It can be used to inhibit imports which is what is happening. If you dont have the money you can't import.

Technological improvements and clean energy development - great ideas but where's the big business interest and involvement?
It's telling that cable and satellite systems can be developed and made widely available for relatively low end user cost. Also, if cars were not mass produced they would be very expensive.
The issues holding back the implementation of such technologies are not trivial so the government should do more to help.
People have been making these sorts of suggestions on these blogs for months yet they keep on being ignored or ridiculed as fantasy. I'm sure it's easier to sit there and guff about economic theories but how about actually getting something done?

I find it amazing nothing has been done yet - we hear that the manufacturing and building sectors need help and we need to reduce carbon emissions. Why not invest in solar power hot water? Helps all three points above. After a quick check, the best technology at the moment seems to be German - no surprises there.

foredeckdave

You are concentrating on 'solutions' dave. There are no solutions, not in the near term. The only sane reaction is to adapt to the new environment. Otherwise all that is happening is that the envirnoment is trying to be manipulated again which is how we got here. I can tell you now that the main outcome of adapting to the new environment will be a major reduction in taxation volumes flowing to HMG. This is not just due to a fall in the number employed it will be amplified by seeking new modes of business which dramatically reduce overhead and tax burdens such as business rates. So if you want to sort anything out you have to sort the public sector out. Brown will not do it so it will be the next lot, who will open the books and say ohmygawd, closely followed by tuffluck we have to do it if you dont like it blame the Bs, who drained the coffers. So if you want a business you look to those still with money, the old school and if you want public services you will be almost certainly means tested and/or face a reduction in provision anyway. There is no promised land. There is no new high tech deliverance. This country cannot even get to grips with implementing the internet properly so how easy do you think a radical implementation would be.

I reiterate, this is a question of will and direction.

The last time there was a Depression, it was ended by massive public spending in the form of WWII. The will and direction was given to the people in the form of wartime propaganda.

Now we are faced with temptations to protectionism, nationalism, and ultimately the possibility of military spending and war. Even when the Falklands happened people speculated then that perhaps the war was by arrangement between Argentina and Thatcher as economic stimulus policy.

Well let's have a war - but let's declare war on our own bleak future, and let people embrace the fanaticism of the environmentalists to some extent. Let people feel terrified about global warming, let people feel appalled at the effects the petrodollar hegemony has had on the 20th century, horrified at starvation and disease and how it might happen to them. Mobilise them towards a common good, instead of inter-national hate.

65 mr tweedy

You basically are gambling, and assuming success will come because it is meritworthy. This is no great surprise. Gambling is one of the sectors that always holds up in recession. As Ladbrokes have announced. People become more desperate for a solution not less, and will put money into something, anything, they think will solve the problem. Brunel developed a better railway system technically but it was displaced by Stephensons inferior system because it was implemented faster. It is not an issue of technology, it never is, it is an issue of implementation.

"Give them bonuses in the form of bank shares is what I say "

67 franksz

You are just plain wrong. Sorry. You wish to see a step discontinuity and the reality is wholesale infrastructure changes can only creep. Look at China and Poland. Both burning coal, both still building new coal fired power stations. There is enough problems trying to stop this sort of thing. You need affluence to fund development. Retrenching is more likely. The fact BO wants to put money into high tech is good, but it does not mean he will acheive. You assume acheivement is possible. No strategic planner will want to scrap existing systems and technology until something is proven and functioning on a large scale. So you are by definition talking of running two systems side by side which is expensive. The inertia is massive. Progress gradually is better than no progress. set the bar too high and nothing will happen

No. 68. FrankSz

Frank - I did see your post on the other thread. Thanks for the advice.

#67. FrankSz

My comment "pure fantasy" referred to the technology to which you refer. You can wish for something to be a panacea, but that does not necessarily make it so. Hydrogen is a difficult gas to store - you either need enormous pressure or cryogenic temperatures (or you can absorb small amounts onto the surface of very expensive metals like platinum). Distributing, storing and transferring hydrogen as is expensive and difficult.

Basically, we would be crippled by the expense of the system while the Chinese build coal power stations and laugh at us.

Furthermore, are you making an environmental argument or an economic argument?

b) If you attribute a value to intangible costs costs in any situation you can make anything either economical or uneconomical depending on the arbitrary values you place on the intangibles - it becomes a moot point.

c) True, water management will be an increasing issue with population growth, but it will not "trump oil". Unlike oil, water is rarely destroyed and turned into something else. It goes in a water cycle. E.g. you burn oil, there is not oil any more, you have CO2 and H2O instead. However, drink water and the water goes into your cells - they are still water molecules though.

d) "Renewable Energy" still has its cost. E.g. to build a solar furnace you need to expend energy and materials on the construction and maintenance. Currently, these cost make it more expensive than existing energy sources.

e) You seems to have boundless enthusiasm. Unfortunately enthusiasm is alone is not what makes things work. In many cases it is the cold hard science that has to solve the problem. At the end of my post, I actually advocate investing in science and education. Unfortunately, if you roll out new technology before it is ready, then you will be plagued by problems and cost overruns and the technology in question will get such a bad reputation that no one will ever touch it again, even if technology breakthroughs later occur.

P.S. If you want to reduce oil dependency, there is plenty we can do now. E.g. build a proper network of cycle paths, remove all VAT on bikes, have programs that either let people work from home or move closer to their work (rather than the current system of penalising people just for moving house with Stamp Duty.) None of this is rocket science!

#73 Mr Tweedy

I like your internationalism.

So Her Majesty's government has less income than it thought and more liabilities than it realised. Now, there is a surprise!

Can this government survive long enough to be forced into making the essential cuts in government expenditure? About GBP100 billion.

I think Gordon will hang on for the full term and so will probably find himself having to implement heavy cuts in public expenditure.

I will look forward to the day!

#76

Defeatism. Of course it would take time, years. There is no other option.

As noted, private debt can be dealt with through bankruptcy, but public debt is permanent unless written-off through sovereign default.

The implicit protectionism that has been underway for some time now (no matter what public statements to the contrary are made) can only intensify.

The return of banks to their home bases is well in 'progress' and the next step will be competition for treasury bond auctions between nations. As so many nation-states have gone into depression, bond sales are going to be VERY interesting.

The are only a limited number of buyers for national debt. Nations will be trying to make their issues more attractive than others - a buyers market - value falls for distressed sales - darwinian principles re-emerge - who can bust their neighbour quickest!?

73 franksz

So now war is the answer. What level are you wanting to play this game.

The UK has only just paid off the mortgage (2008) to The US due to the UK basically being bankrupt following WW2. The public infrastructure programme and the private housing initative Fannie Mae and Freddie Mac also had their part to play.

So the whole of society is to place massive war like investments on a maybe technology solution when it is not clear which is the way forward. Because whatever you say it is not clear. The advocates of one potentially emerging technology or another are not exactly uninterested are they. Working in the real world has all sorts of consquences and limitations. It is not software, which encapsulates its own environment and is not real. You dont just change a logic loop in the realworld and re run.

I really do not see what the angst generally is about the japanese experience. It simply took longer to recover than many wanted but recovery happened. It is the nearest event to what is going on now, not the 1930s.

80 stanilic

Unfortunately I do not share you optimism that Brown is capable of stopping spending. The only salvation is a change of government. Brown appears to have no intention of saying anything he has does has been wrong. It comes down to trying to stay healthy and wealthy and with income. Anybody without is likely to have a problem. Always the case but never more so.

No. 69. glanafon
No. 64. simonmw3

It may be wishful thinking - in that new efficiencies will not be found in time to prevent the world slipping into another great depression. If we have them, we need to implement the efficiencies now, but I don't see any immediately on the table.
If we only make business efficiencies by way of staff redundancies and wage cuts, this will just add to the fall in asset values, and cause the bad debts to crystallise faster.

The sad truth is that debts secured against falling asset values can only be paid off through earnings from the real economy. Growth in the real economy will only come from better utilisation of the planet's scarce resources. The real economy is nothing more than expoitation of scarce resources for profit and wealth.

The Great Depression of the 1930s was eventually cured by America's industry producing war materials, which it sold to Britain and the Commonwealth. The war itself brought technological advance. The USA emerged from the war richer, whilst Britain and Europe emerged bankrupt.

Government spending to prop up unprofitable businesses will not cure today's depression, but will only treat the symptoms. Eventually, even the government will run out of money and will have to let failing businesses slip beneath the waves.

I do not know where new efficient business practice and/or technology will come from. I am not a scientist. The chances of it emerging in time to prevent the depression are very slim, but we must search for it nonetheless. Even if foreign nations find it first, say in 5 years' time, the world will be better than if no-one found it at all. Necessity is the mother of invention.

Only when new technological efficiencies arise, and the debts are paid off, will the world economy start to recover. Without them the world economy will remain stagnant with high levels of unemployment.

No. 83. glanafon

Did Japan recover?

No. 82. TheNewPonzi wrote:
"As noted, private debt can be dealt with through bankruptcy, but public debt is permanent unless written-off through sovereign default."

Someone has to pay for the default of the private debt. It will be banks and businesses, as their sales ledgers continue to spring leaks or blow up completely.
At that point the goverment will step in, to further bail out the banks and other important businesses. Therefore, the private debt just migrates to become public debt.

The government thinks it can pay for all this by selling gilts to the BoE. It attempts to blow a new super bubble to replace the ones that have already popped.....

85 mr tweedy

I do not doubt your good intent or franksz's

There are a great many things which can be put in place already here. You do not need lights blazing all over the country at night. You do not need supermarkets backlighting shelves row after row. Public expenditure could be cut back without forever seeking its expansion. People who do not actually need large vehicles should have to pay to run them. Recyclable packaging should be required by statute. The problem is as soon as anybody says lets do this or that some lobby pops up look at the tax on gas guzzlers.

Rather than long term activities immediate moves should be made to make the whole consumer society cycle more efficent and more accountabled.

You are underestimating the difficulty of both identifying innovation, securing it, and implementing it, thats all.

#78

No more difficult than distributing petroleum and diesel.

[Unsuitable/Broken URL removed by Moderator]

Regarding your comment on China burning coal, and your question if this was environmental or economical argument:

This is very interesting because the way I see it, this distinction is the problem.

First let me say I am not an environentalist ideologue. I am interested in economics and have come to realise that there is no distinction between the desire to improve economics and the desire to improve the ecology.

The Chinese or Polish for that matter may *believe* that their costs are lower, but in fact they are not. There is nothing more than an inadequacy or failing in their economic theories. Their *actual* costs are much higher.

I have said it before, but again: there needs to be a discussion of 'value', the concept of it.

Money is nothing more than an attempt to quantify the level of motivation, desire or value that a human has. Conversely it helps to quanitify our level of aversion to something. Costs are things we don't want. Revenues are things we do want. Cost quantifies what we sacrifice, profit quantifies our gains.

When we buy something with money, we sacrifice that amount of potential human desire encapsulated and expressed as that amount of money, which causes the other party to yield some product or service.

We make the assumption that the transaction is closed, but it is not.

If you were to go to a shop where every item you purchased over 10pounds resulted in the shop keeper giving you a bop on the nose 3 months later, you would have a different level of motivation to buy that product. Your level of aversion to buying that product would rise - - the actual price(cost) of the product is higher than advertised.

This is the case with most things. China burns coal, but suffers horrendous levels of birth defect, environmental destruction and so on. Why? Because the price is wrong - the impact is wrong.

This is very much connected with the crisis of today.

Unaware, people's idea of value has been corrupted - value has become embodied in a USD printing press and has become equated with debt. This has resulted in vast amounts of credit to be created, but with no system that recognises 'true value' to decide into which areas the money should go. Money flows into asset bubbles like dotcom, causing millions of people to concentrate on purposeless insanity in the false idea that it is potentially valuable.

It flows into telecommunications infrastructure, the internet, pointless mobile devices, Facebook and other useless luxuries, because it helps globalisation, and globalisation was nothing more than exploitation of 3rd world labour to import deflation into the hyperinflationary vacuum in the realm of the printing press.

What has happened in short, is that the system of money has become divorced from the system of people, animals and living things. Rather than it being a tool to help us quantify the level of our wishes, it helped shape our wishes collectively.

What we need is to increase the 'value' of money - the 'meaning' of money in terms of value - in other words, deleverage and deflate. Then we need to make sure there is sufficient and sophisticated regulation in place, to ensure that currently hidden costs and benefits (externalities) are properly factored in.

Then we will see such technologies emerge naturally, and be economically viable.

#84

Sorry no offense, but all I hear when I read your post is "Dont risk, stay put, do nothing, being bold and branching out into new territory is a lot worse than simply letting things slowly rot in quiet desperation"

That is just a reflection on your personality, not pragmatism

#85

Yes that's just it. President Vaclav Klaus was railing against the global warming/environmentalist movement recently, not because it is without scientific merit, but because it's structures and methods of propagation reminded him too much of Soviet socialism - ideology.

I dislike dogma and ideology intensely, but in this scenario the green movement seems to me like a preferable alternative than slow collapse into protectionism and far-right nationalism. A war of sorts is inevitable, so let's mobilise into high tech.

The situation is analogous to WWII. The US are moving 1st here, and the UK will end up in the same situation as in 1945 - indebted to the US for technology it needs in the war.

86 mr tweedy

It depends on what is expected as recovery.

i expect what happened in Japan to happen here to some extent.

If you take credit you become wealthier in the present and poorer in the future.

If the assets or items you buy do not match the costs incurred in the future you are poorer.

So the only way to move forward in the future to keep your wealth is to take credit.

Stop the credit mechanism for whatever reason and you then are poorer with no way forward.

However it is the overconfident that borrow. Large sectors of the population are more careful.

So the economy is driven by credit or debt. With a minority driving it. Cull that minority and you do not have anybody stepping forward to take the credit to keep the economy buzzing. So the residual economy post-cull of the overconfident is the environment and it will only grow slowly eg as per Japan.

Pushing credit makes no difference when there is not the demand for it becasue those that are left are by and large adverse to it, that is why they were unaffected.

You will not see recovery until the housing market resumes and that will be some time.

#15 jadejean

As a small business owner I can tell you that avoiding paying tax is every bit as difficult as it is for the “ordinary people” you refer to. Please don’t get the few very large business mixed up with the majority of businesses in this country!

#25 the-real-truth

In part I agree, but the likelihood is that it would have NR that they let go bump.....

...... imagine the queues of savers outside the B & B, HBOS, RBS, etc as report after report of their financial situation was released.

I certainly wouldn’t have trusted them to “work out what to do” after all they have taken a perfectly sound and solid industry dating back 100’s of years, and crashed it head long into the ground in a decade!!!!

#17 FrankSz

“What difference whether the debt is public of private”

NONE WHAT SO EVER – but it should....

We talk about Keynesiasm as though it’s something the Gov is just introducing. This flawed tactic of stimulating the economy has been in operation for the past 10yrs.......

..... can no one see that we have been stimulating the economy for 10yrs......... only the Gov sat back and encouraged the Banks to do the lending and the people to take on the debt rather than the Gov!!!!

The Gov are now getting saddled with the cost of generating an economic boom via the back door!!!!!!!!

Keynesiasm is not the solution to a problem caused by Keynesiasm

81 franksz

Its not defeatism. It is realism. I have working in R and D, manufacturing. Cutting edge stuff against the US. Blue chip companies. Technically equivalent if not superior. Sorry frank but you do not understand the difficulties and saying optimism will carry you thru as a strategy is flawed.

#85 Do a search on 'solar hot water'. This technology is proven and has improved for application to northern climes.
Apparently the uk gets up to 60 per cent the sun's energy at the equator.
So there's efficiency gain and employment.

In times of change, it is the learners who will inherit the earth while the learned will find themselves beautifully equipped for a world that no longer exists.

-- Anon

90 franksz

My personality. No my experience. BTW we are successful here. We trade with the old school types that are still active. We are innovative and know what is invloved. It does not matter what the marketing says, it does not matter what rationally you think a group of people want. All that matters is what they want to buy. We were positioned badly in the last recession and changed sectors. Away from the indebted. You have no evidence whatsoever that people want what you are saying they want. You are actually saying what you want. Fair enough - you now have to persuade people to fund you, get the staff, crack the technology, commercialise it, implement it. Off you go. Most end up broke trying.

#73
With you all the way!!

91 franksz

war is not the answer.

Meanwhile, where did I leave my violin?

(whistles) ;-)
ed